Allen to replace Hickler as head of DHL Express U.S. operations

Jeff Berman, Group News Editor -- Logistics Management, 5/6/2008

BONN, Germany—Deutsche Post World Net (DPWN), parent company of express service and logistics services provider DHL, has made an executive change at the top of DHL Express, according to media reports.

Ken Allen will replace Hans Hickler as DHL Express CEO, according to a Bloomberg report. Allen had previously been in charge of DHL Express in Canada, eastern Europe, the Middle East, and, and Africa. Bloomberg also said that this change was announced at DPWN’s annual shareholders meeting in Cologne, Germany yesterday.

A DHL Express spokesperson told LM that Allen is deeply experienced within DHL and has a strong track record in leading successful business turnaround situations and executing detailed implementation plans. In his immediately prior role as CEO of DHL Express, Eastern Europe, Middle East and Africa (EEMEA), he doubled revenue growth and margin within two years. Equally, his experience as CEO of Canada resulted in turning many years of negative growth into what is now a positive revenue and profit position for the company. Prior to that, Allen was instrumental in building the Asia region during the currency export crisis from 1997 to 2000 as CFO, DHL Express Asia Pacific.

The spokesperson added that Hickler will remain at DHL Express and continue to report directly to John Mullen, global CEO, DHL Express. Hickler will continue to remain on the DHL Express global management board, and will be in charge of some strategic initiatives—but the spokesperson could not specifically disclose what these initiatives are.

This news comes at a time when it has been widely reported that DPWN is leaning towards re-evaluating its strategy for DHL Express in the U.S. Over the past several years, the company has faced a largely uphill battle for market share, competing against industry bellwethers UPS and FedEx, as well as the United States Postal Service.

Some of the company's domestic difficulties include: a difficult integration of Airborne Express since its $1 billion acquisition of Airborne in 2003; February news that it planned to reduce its U.S. workforce by 600 positions; investment bank reports calling for a major restructuring of U.S. operations; and DPWN writing down $874 million on U.S. operations earlier this year.

In January, the Financial Times Deutschland erroneously reported that DPWN was in talks with FedEx to sell DHL Express’ U.S. operations to FedEx and DPWN assuming control of FedEx’ European services. A DHL spokesman told LM at the time of this report that it was speculation and that DHL has no intention of exiting the U.S. business.

But even if DHL will not be leaving the U.S. it is highly possible its U.S. operations are likely to see more changes, aside from Allen replacing Hickler as U.S. CEO. DPWN CEO Frank Appel told shareholders that “the Group has consistently narrowed down its options to substantially improve the performance of its Express Americas business and will announce a plan for the business by the end of May.” He added that the U.S. market remains a firm pillar of the express business' global strategy.

Doug Caldwell, executive vice president of ParcelPool, an Orem, Utah-based small parcel delivery consultancy and services provider, said in an interview the decision to replace Hickler with Allen is not surprising.

“This change is not to be unexpected, given the recent performance of DHL Express in the U.S.,” said Caldwell. “It seems like these decisions regarding U.S. operations are being made at the headquarters level in Germany. Strategic planning may still be done in the U.S., but executive decisions like this are being done at the top level.”

Caldwell added that it is a possibility that DHL Express may “shrink” its U.S. network a bit and look at some cost-cutting options, which may be logical moves for beginning a turnaround in the U.S. And he added that it is more likely nothing will be announced regarding its U.S. plans until they are formally announced later this month.